Wakilii

Imperial Bank (U) Limited v T-Brucks East Africa Limited & 2 Ors (Civil Suit No. 637 of 2013)

High Court · [2018] UGCOMMC 81 · 2018 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan and enforcement of personal guarantees
Decision
Judgment entered on admission in favour of the plaintiff; defendants ordered to pay principal debt, general damages, interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court entered judgment on admission against all defendants jointly and severally. Where defendants made unequivocal admissions of material facts in the joint scheduling memorandum and their defence contained only evasive general denials, the admissions bind them under s.57 of the Evidence Act and no triable issues remain. Personal guarantors who execute unlimited guarantees create a primary obligation to pay immediately upon default by the principal debtor and can be sued without the creditor first exhausting remedies against the principal debtor.

Outcome

Judgment entered on admission in favour of the plaintiff; defendants ordered to pay principal debt, general damages, interest and costs

Facts

On 6 July 2012, Imperial Bank and T-Brucks East Africa Limited entered into a loan agreement for UGX 250,000,000 at 27% interest per annum, repayable in 24 monthly instalments, secured by motor vehicles and trailers. On 9 August 2012, the second and third defendants (directors of the first defendant) executed unlimited personal guarantees in favour of the bank. The first defendant defaulted on loan repayment. The defendants were served with notice to remedy the default but failed to do so. At the scheduling conference, the parties agreed facts including that the loan was obtained, the guarantees were executed, and the first defendant defaulted. After several adjournments, counsel for both parties agreed to move for judgment on admission. The joint scheduling memorandum contained agreed facts but the written statement of defence contained only evasive general denials without specific traversals of the plaintiff's allegations.

Issues

  1. Whether the Defendants breached the terms of the loan agreement.
  2. Whether the 2nd and 3rd Defendants are liable to repay the loan as guarantors.
  3. What remedies are available to the parties.

Orders

  • Judgment on admission entered against the Defendants jointly and severally under O.13 r.6 CPR.
  • Declared that the Defendants breached the terms of the loan agreement.
  • Defendants to pay to the Plaintiff the sum of UGX 272,225,225/- due and owing.
  • General damages of UGX 10,000,000/- awarded to the Plaintiff.
  • Interest at the agreed rate of 27% per annum to be paid from 1st November 2013 till payment in full.
  • Interest at the rate of 12% per annum to be paid on general damages from the date of judgment till payment in full.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Civil Procedure — Judgment on Admission — Requirements for Entry
For judgment to be entered on admission under O.13 r.6 CPR, the admission must be clear, unambiguous, and unequivocal, stating precisely what is being admitted and admitting a claim in the suit.
Civil Procedure — Joint Scheduling Memorandum — Effect of Agreed Facts
Where parties agree to facts in a joint scheduling memorandum filed at a scheduling conference, those agreed facts are no longer in dispute and are put out of the scope of litigation under s.57 of the Evidence Act, and no further proof is required unless the court in its discretion requires otherwise.
Civil Procedure — Pleadings — Evasive and General Denials
A defendant who makes only general denials without specifically traversing allegations of fact, contrary to O.6 r.8 CPR, or who makes evasive denials that do not answer the point of substance, contrary to O.6 r.10 CPR, is deemed to have impliedly admitted those material facts.
Banking & Finance — Guarantees — Primary Obligation of Guarantor
Under s.71(2) of the Contracts Act, a guarantor's liability takes effect upon default by the principal debtor. Where a personal guarantee creates a primary obligation to pay the guaranteed amount, the guarantor becomes obliged to pay immediately upon default by the principal debtor, and the creditor is entitled to sue the guarantor without first exhausting all remedies against the principal debtor.
Contract Law — Damages for Breach — General Damages
General damages for breach of contract are assessed according to the court's opinion and judgment of what a reasonable person would award, with the intention that the party complaining should, so far as money can achieve it, be placed in the same position as if the contract had been performed.

Legislation cited (14)

Cases cited (14)

  • Natha v Jodha (1884) 6 ALL 406
  • Godfrey Lule v Attorney General (Court of Appeal Civil Appeal No. 2 of 2000)
  • Kamugisha Lennard v Uganda Revenue Authority (High Court Civil Suit No. 311 of 2012)
  • Kampala District Land Board and Another v National Housing and Construction Co Ltd (Supreme Court Civil Appeal No. 2 of 2004)
  • Tororo Cement Co Ltd v Frokina International Ltd (Supreme Court Civil Appeal No. 2 of 2001)
  • Comptroller of Customs v Western Electric Co Ltd [1966] AC 367
  • Ashmore v Corporation of Lloyds [1992] 1 WLR 446
  • John Peter Nazareth v Barclays Bank International Ltd [1976] EA 39
  • Joshua v Uganda Sugar Factory [1968] EA 570
  • Bank of Baroda v Mahomed [1999] Lloyd's Rep 14
  • Luka Matovu & Others v Attorney General (Miscellaneous Application No. 143 of 2008)
  • Agricultural Finance Corporation vs. Kenya National Insurance Corporation, Civil Appeal No. 271 of 1996
  • Moschi v Lep Air Services [1973] AC 331
  • Hajji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Imperial Bank (U) Limited v T-Brucks East Africa Limited & 2 Ors (Civil Suit No. 637 of 2013) [2018] UGCommC 81 (27 June 2018)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.